Maybe it’s the onset of autumn that prompts companies to seek summer elsewhere in the hope of finding greener grass. Or maybe they're taking a Halloween spin — as in, what costume would Robinhood like to wear? Coinbase's, perhaps?
At least three well-known financial services companies soon will be testing their capacity to launch new products outside their typical silos — in territory more closely associated with other established fintech players.
Robinhood, best known for its stock trading app, will beta-test crypto wallets with select clients next month, the company said Wednesday in a blog post.
The wallets will let Robinhood customers own digital assets, consolidate them into one account, and transfer them in and out of the app to pay for goods and services. Users now can just trade cryptocurrencies, but that function accounted for about 41% of Robinhood’s net revenue during the second quarter, according to Bloomberg. The wire service broke the news of Robinhood’s expanding capabilities Monday when a developer found clues to the new business in code for the company’s app.
Robinhood’s customer base apparently isn’t lacking in enthusiasm for crypto. Nearly 300,000 users signed up for the wallet’s wait list within hours of being sent a push notification announcing the product, the Financial Times reported. The message, in vintage Robinhood fashion, featured a high-five emoji.
“We’re not first to the market — we’ve been taking our time to make sure that we build this in a phased approach,” Robinhood Chief Product Officer Aparna Chennapragada told CNBC.
The wallet’s beta-testers will share their feedback over Robinhood’s blog and Twitter, the company said.
Robinhood’s digital-asset business has swollen considerably in the three years since the company launched crypto trading. About 60% of funded accounts on Robinhood traded crypto assets during the second quarter, the company told the Financial Times. The company saw $233 million in second-quarter revenue from crypto trading, according to the publication. That’s up from $5 million during the same three-month span a year ago. Robinhood counted $22.7 billion in crypto assets under custody as of June 30 — a nearly 30-fold jump from a year earlier, the Financial Times reported.
Chennapragada noted the company is “completely aligned with our regulators and the [Securities and Exchange Commission] to make sure that we are working on this with educational tools, with protection, with safety.” The company recently hired a new chief compliance officer for its crypto unit, The Wall Street Journal reported Friday.
Some safety features on the upcoming wallets include identity verification and multi-factor authentication, she said.
PayPal considering stock platform
PayPal, on the other hand, is considering launching a stock-trading platform, CNBC reported last month.
That isn’t the only new business line PayPal is eyeing, though. The fintech is looking to launch a savings account in the coming months — in partnership with Synchrony — that offers a 0.4% annual percentage yield, Bloomberg reported. That’s akin to the 0.5% interest that savings accounts through Goldman Sachs’ Marcus generate but more than six times the national average, according to Bankrate.
“The last 12 to 18 months have been some of the most productive in terms of pacing from a product perspective in the enterprise’s history,” Julian King, senior vice president of PayPal consumer, told Bloomberg. “We should expect to continue that drumbeat of innovation.”
PayPal also wants to add investment capabilities, new ways to pay in-store and a function that lets users message each other after peer-to-peer payments are made on its site, according to the wire service.